Part III. German Monetary Targeting: A Precursor to Inflation Targeting

any features of the German monetary targeting regime are also key elements of inflation targeting in the other countries examined in this study. Indeed, as pointed out in Bernanke and Mishkin (1997), Germany might best be thought of as a “hybrid” inflation targeter, in that it has more in common with inflation targeting than with a rigid application of a monetary targeting rule. The German experience with monetary targeting, which spans more than twenty years, provides useful lessons for the successful operation of inflation targeting, and this is why we study the German experience here. Several themes emerge from our review of Germany’s experience with monetary targeting:1